Sunday thoughts: How will the DfE deal with teacher pay claims this Autumn?

The NEU are on the move. Even the more moderate ASCL isn’t ruling out strike action. The reason — a slew of data showing that teacher pay is falling in real terms, and some horrific data on teacher supply.

What will teacher pay be in Sep, could we see strikes, and how on earth does all the money add up?

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This graph has been doing the rounds on Twitter, and the message is pretty clear that since 2005, teacher pay has been consistently falling:

Another way of looking at the same issue comes from NFER, who model teacher pay compared to average earnings since 2010, and show a similar picture:

Meanwhile, the figures for teacher workforce are horrendous. Just as a quick summary:

• The number of teachers leaving the profession increased by 12.4% compared to last year — and only 11% of those were retirees. [These figures, in fairness, are affected by Covid, with there being an element of legacy moves not taken during the pandemic now appearing in the data].
• Teacher vacancies are at the highest level since records began in 2010 — with a 42% increase from last year’s data.
• There has been a 14% rise in the number of job ads, compared to this time in the cycle before Covid.
• ITT targets have been missed — again — by a lot — again. This graph, once more from the NfER, shows trainee teachers placed into schools by May, compared to DfE targets. We have 16% of physics teachers ready to train in English state schools compared to what it is predicted we need.

The two issues are — mostly — related. Although there are other factors which encourage people into teaching, and then staying in teaching, including overall workload, pupil behavior, school environment, and a supportive culture, there’s clearly a link.

Specifically:

• DfE evidence to the School Teacher Review Body (pp 19–23) shows that a high starting salary makes teaching competitive with other graduate professions, with private sector starting salaries at just over £30k both from High Fliers and ISE, and lower outside London (£27.5k in the South East, and £24k Yorkshire). Furtermore, DfE cite a series of academic papers that salaries matter for teacher recruitment.
• Research from those hard-working wonks at NfER again shows that bursaries in ITT, as opposed to student loans, both increases the number of people entering ITT, and the composition of entrants.
• Research from Sam Sims and colleagues at UCL shows that financial payments help with retention, albeit the study looked only at maths and science teachers, and only those 2 years in.

The frustrating thing from the government’s perspective is that they committed to a £30,000 starting salary for teachers in their manifesto in 2019. This was a strong commitment, with a lot of evidence behind it, and an expensive commitment too. But the trouble is that events (dear boy), and inflation, have overtaken it.

In March this year, DfE published their proposals to the pay review body. This suggested pretty large increases for starting teachers — 8.9% this September, and a further 7.1% in September 2023, to hit the £30,000 target. For other junior teachers, increases were suggested from 4% to 7% this September. But for more senior teachers (any of those on UPS), the pay award was suggested to be capped at 3%, and similar for leaders. The table below from the TES shows recommended salaries for outside of London — London uplifts are proposed to be smaller (while teachers in the rest of England will, in total, receive a 15.3 per cent increase over the two years, teachers in inner London will only see their salary uplifted by 9.8 per cent).

It is worth noting that these are just increases to the point scales. For every teacher currently on M1–5, they will also move up a point on the scale itself, so their total cash pay increase is likely to be larger. It is also worth noting that the total compensation package for teachers, including the even now reformed pensions, are generous. And finally, some MATs — albeit not that many — pay above the teacher scales, using their flexibilities to do so.

But at the end of the day, for many teachers, their pay increase in September is forecast to be well below inflation. That’s a problem for them — and, if it manifests in continued falls in recruitment and retention, is a problem for government as well.

March was a long time ago. And the STRB isn’t bound by government requests to it. In other words, they can come back with a recommendation in the coming weeks that is higher than that originally proposed by government. My guess is that they will.

From a policy perspective this then puts government in a bind. There are three things to consider:

• Quantum of an award
• Distribution of an award
• Sources of funding for an award

First, quantum. Let’s hypothesise that the STRB suggest an overall award of much more than government asked for, probably tilted to junior teachers again, but with more generous payments (5%-7% overall, perhaps) to those on UPS and on leadership scales. The government then has to decide whether to honour that award. This is a question far bigger than DfE can answer on its own, because the same dilemmas will face Secretaries of State making awards on nurses, soldiers, police and the like as well. Larger pay awards have a contagion effect (I use that word neutrally) because of the natural anchoring effect that the first few awards have on those that come after. So No10 and HMT will ultimately make a call. The Government has also set its face strongly against an argument for high pay awards chasing inflation, on the grounds that it perpetuates cost spirals. I’m not an economist, but I simply observe that making a judgement on total public sector pay for in excess of 1 million workers, where government is the direct funder and employer, is a much bigger political and economic deal than handling an award for 40,000 rail staff where nominally the pay decisions are for the train operating companies.

Secondly, distribution. At least some of NEUs concern — and ASCLs — is that an award tilted to junior staff leaves more experienced staff isolated. They don’t face a lower inflation rate than their younger colleagues. Government will be tempted to try and model any final award to push it to the areas of particular shortage, which seem to be principally in younger teachers, some regions, and some subjects. But while that might make policy sense, and would reduce the overall bill of a big claim, it is unlikely to fully assuage industrial relations concerns.

And thirdly, sources of funding. In normal times, the argument goes: HMT has allocated DfE its total budget. DfE in turn has allocated budgets for the forthcoming years to schools and trusts. Any and all cost pressures, whether for teacher pay or textbooks, comes from that money. But of course, no one forecast, or allocated funds for, a pay rise of the type that might be recommended. Schools and Trusts will say they don’t have headroom to pay above what DfE gave them — not least given myriad other cost pressures, for example on energy bills. DfE will say they don’t have extra cash to make up the difference to the system. HMT will say there’s no more money to be given to DfE. At some point, if a higher award is to be made, one or more of those statements has to be broken. From DfE’s perspective, managing the delivery of a higher award, and simultaneously arguing with HMT and with schools, is almost as tricky as agreeing what the award should be.

So what might happen?

My starting point is that the threat of strike action is real, and ballots would be returned to the level by law required to support it, if sent out.

Secondly, drawn from polling on the train strikes, a teacher strike on the grounds of an inflation-matching pay claim would be reasonably well received (maybe tolerated is a better word) by parents, albeit with strong party splits.

Thirdly, the STRB will recognize the changed economic need and come back with a pretty hefty award, well in excess of what was originally asked (and budgeted for). I’d guess this would be a minimum of 5% overall, and quite possibly higher.

Fourthly, government will recognize the need to go beyond what it modelled at the time of the Spending Review, and honour at least part of that award, under political pressure (and ignoring their low tax, low spending backbenchers).

Fifthly, they will try to hold the line which says teachers (and nurses) are an exception, and limit contagion to other public sector workforces such as prison officers, soldiers, and civil servants. This will, probably, work, though not without consequences elsewhere.

And lastly, there will be an almighty bunfight as to how the award is paid for. My best guess is that it will need to split between another pay grant from DfE to schools (itself partly funded by HMT), but that schools and trusts will be asked / required to make some of this difference up themselves. This will not land well.

But at every stage of this process, there be dragons. If the award suggested isn’t big enough, or if the government don’t accept it, or if they don’t fully fund it, we could well see the biggest large scale teacher industrial action since 2016.